Auditor slams Canadian gov't for helicopter cost over-runs

Sheila Fraser, the Auditor General of Canada, attends a press conference in Ottawa, Ontario, Canada, on October 26, 2010. Canada' s Auditor General, who is in charge of making sure government money is spent wisely, Tuesday sharply criticized Canada' s contracts to buy military helicopters, accusing the Department of Defense of deliberately hiding the 11 billion Canadian dollars price tag. (Xinhua/Christopher Pike)

OTTAWA, Oct. 26 (Xinhua) -- Canada' s Auditor General, who is in charge of making sure government money is spent wisely, Tuesday sharply criticized Canada' s contracts to buy military helicopters, accusing the Department of Defense of deliberately hiding the 11 billion Canadian dollars price tag.

Sheila Fraser, who is employed by Canada' s Parliament, looked at the issue of rising costs and long delays of the two helicopter deals. In recent years, the cost of the 28 CH-148 Cyclones and 15 CH-147F Chinooks has doubled, while the delivery dates of the helicopters have been pushed back.

The all-in cost of the Cyclones went from a preliminary cost of 3.1 billion Canadian dollars in June 2003 to 5.7 billion Canadian dollars just over five years later, while the Chinooks jumped from 2.022 million Canadian dollars in June 2006 to almost 5 billion Canadian dollars three years later.

The helicopters were ordered to replace the 40-year-old fleet of Sea King helicopters, which have had an embarrassing record of crashes. Fraser accused the government of pouring money into the helicopter program.

"We also found that National Defense underestimated and understated the complexity and development nature of the helicopters it intended to buy. The substantial modifications to the basic models, resulted in significant cost increases and project delays," she said at a news conference.

The previous Liberal Party government ordered the Cyclones, a marine helicopter mainly used for marine rescue and submarine detection, in 2004 to replace the Sea Kings. The Liberals killed an earlier deal to replace them with EH-101 helicopters.

The Conservative government, elected in 2006, ordered the Chinooks, a medium to heavy lift helicopter capable of carrying small armored vehicles.

The Cyclones are now seven years behind schedule, while the Chinooks are five years late.

Fraser said the Chinook deal showed signs of political favoritism.

"The contract award process was not fair, open and transparent," Fraser said.

She also accused the government of hiding the real cost of maintaining and operating the helicopters and may not actually have the money to maintain and service them.

"Without this costing information and sufficient funds, National Defense may have to curtail planned training and operations. This is cause for concern," she said.

She accused the Conservative government of misleading Canadians when they said they were buying an inexpensive helicopter "off the shelf."